TaxTMI 
TaxTMI 
2017 (2) TMI 76
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 31.12.2013, wherein the assessee's income was determined at Rs. 86,16,260/-. In doing so, the Assessing Officer (AO); (i) treated the assessee's returned business 'income from letting out of property' as 'income from house property' and accordingly recomputed the same at Rs. 5,55,39,292/-, and (ii) in this regard also disallowed the assessee's claim for interest paid on borrowed capital to the extent of Rs. 4,98,87,988/- to the extent of interest free loans advanced to sister concerns. 2.2 Aggrieved by the order of assessment dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wing relief to the assessee on the amount of disallowance on the basis of a bank statement (i.e. additional evidence) furnished by the assessee during appellate proceedings, without giving an opportunity to the Assessing Officer (AO), before whom the same was not filed, in order to examine, verify and rebut the same; which is in violation of Rule 46A of the I.T. Rules, 1962. In support of this contention, the attention of the Bench was drawn to para 2.3.1 of the impugned order wherein the learned CIT(A) has recorded and acknowledged that the assessee has placed on record the Bank statement to prove that the loan was sanctioned on 18.03.2011. It is submitted that it is also apparent that no report on this was called by the CIT(A) from the AO....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any enquiry to be made under section 250(4) of the Act which has been done. In support of this arguments, the learned A.R. placed reliance on the following judicial pronouncements: - (i) Smt. Prabhavati S. Shah vs. CIT (1998) 231 ITR 1 (Bom) (ii) B.L. Choudhary vs. CIT (1976) 105 ITR 371 (Orissa) (iii) CIT vs. Poddar Swadesh Udyog P. Ltd. (2007) 295 ITR 252 (Gauhati) 3.4 In rejoinder, the learned D.R. submitted that the arguments put forth by the learned A.R. in support of the action of the learned CIT(A) in the impugned order are factually erroneous and untenable in law. It is further submitted that the judicial pronouncements cited by the learned A.R. (supra) do not in any way support or come to the rescue of the assessee in the case....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely :- (a) where the [Assessing Officer] has refused to admit evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the [Assessing Officer] ; or (c) where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any ground of appeal ; or (d) where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sub-rule (3) contemplates that if additional evidence is taken on record, then it cannot be considered on merits, unless opportunity is afforded to the AO to examine, comment and if required rebut the evidence or documents or to cross examine the witness produced by the assessee. Apart from this, the AO should be given opportunity to produce any evidence or documents in rebuttal of the additional evidence produced by the assessee. In the factual matrix of the case on hand, we find that the learned CIT(A) failed to afford the AO opportunity of being heard in the matter and therefore the requirements/conditions laid down in sub-rule (3) of Rule 46A of the Rules remain uncomplied with by the learned CIT(A). Sub-rule (4) is an exception to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urposes. 4. Before parting, we refer to the judicial pronouncements cited by the learned AR (supra). We have carefully perused the same and with all humility find that they do not in any way support the arguments put forth by the learned A.R. of the assessee that the learned CIT(A) can accord the assessee relief by taking additional evidence on record without; (i) affording the AO an opportunity of being heard in the matter or without directing the assessee to file additional evidence under Rule 46A of the Rules or would otherwise come to the rescue of the assessee. The case of B.L. Choudhary the Hon'ble Orissa High Court (supra) is not applicable to the case on hand because it refers to an discusses the provisions and powers of the CI....